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Bankrupt Chinese real estate giant Evergrande was ordered into liquidation by a Hong Kong judge on Monday after the debt-laden company failed to present a stable restructuring plan more than two years after defaulting.
Evergrande is the world’s Real estate developers with the most debt It became a symbol of China’s property crisis.
July 24, 2023, Evergrande real estate complex in Yichang, China. (Costfoto/NurPhoto via / Getty Images)
The action by Judge Linda Chan is the latest blow to the real estate giant, amid growing concerns that problems in China’s real estate sector will spill over into other parts of the country’s economy as growth slows. Happened.
“It’s time for the court to say enough is enough,” Chan said in court Monday.
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The decision has investors watching whether Chinese courts will recognize the Hong Kong ruling, given the number of authorities involved, a lengthy and complex process with potential political considerations. This will be preparation for what is expected to happen. Offshore investors will be watching to see how Chinese authorities treat foreign creditors when a company collapses.
Evergrande Group was seeking a turnaround after the Chinese developer battled more than $300 billion in debt defaults. (Allie Song/Reuters Photo)
Mr. Chan appointed Mr. Alvarez & Marsal as liquidator, and Mr. Alvarez & Marsal was involved in Evergrande’s new He said the appointment will be in the interest of all creditors as he will be in charge of the restructuring plan.
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Evergrande, which has $240 billion in assets, defaulted on its debt in 2021, dragging down the struggling real estate sector and hurting the economy. Liquidation judgments create further uncertainty for companies. China is already vulnerable Capital and real estate markets.
Since the industry’s debt crisis erupted in mid-2021, companies accounting for 40% of China’s home sales have defaulted on their debts.
Embattled Chinese real estate developer Evergrande Group was ordered by a Hong Kong court on Monday to liquidate its assets. (Tyrone Siu/Reuters Photo)
Evergrande recently had $330 billion in debt. The default in late 2021 triggered a series of defaults by other construction companies, resulting in thousands of unfinished housing units across China.
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Evergrande may appeal the liquidation order, but the liquidation process will continue until the outcome of the appeal is determined.
FOX Business’ Bradford Betz and Reuters contributed to this report.
